Fewer than one in 10 people assessed for the new sickness benefit has been
signed off work completely, according to Government figures.

More than a third of the 1.3million people who applied for Employment and Support Allowance were found to be fully capable of working, while a similar proportion abandoned their claims while they were still being processed.

Some were found to be capable of holding down a job with the right help while only 7 per cent of applicants were deemed too ill to carry out any work, including cancer patients undergoing chemotherapy; the terminally ill; and the severely disabled.

Charities claim the bar has been raised too high for seriously ill people to claim out-of-work benefits and point out that many decisions are overturned on appeal.

But the Work and Pensions Minister, Steve Webb, said: “These figures show that many people are able to work with the right help.

“We have strengthened the support now available, tailoring it to individual needs so they can overcome whatever barriers they face.

“Those who cannot work will always receive our unconditional support but for those who can work it's right that they get the help they need to get into employment.

“We are continuously improving the medical test to ensure that it is as fair and effective as possible.”

Under the old system, 2.6m people claimed Incapacity Benefit, at a cost of some £12billion a year to the taxpayer, with some receiving it for several years after filling in a self-assessment.

But in a drive to make the replacement ESA scheme more rigorous, applicants can now be forced to undergo a face-to-face medical assessment as well as providing a report from their doctor, as part of a Work Capability Assessment.

Figures published by the Department for Work and Pensions on Tuesday suggest that many of the 1.33m who applied for the new benefit between October 2008 and November 2010 did not need to be out of work.

They show that 39 per cent of applicants were judged fit for work, and told to apply for Jobseeker’s Allowance instead; 36 per cent of claims were closed before the assessment was completed; and 17 per cent of people were found to be capable of carrying out some work if given support under the Work Related Activity Group.

Just 7 per cent of applicants were judged ineligible for any employment and put in the Support Group. Of these, 36 per cent had a “severe functional disability”, 22 per cent had a “physical or mental health risk”, 15 per cent were receiving chemotherapy and 10 per cent were terminally ill.

But of the 37 per cent of all applicants who appealed the decision made about their fitness to work, 39 per cent succeeded in having it thrown out.

Paul Farmer, chief executive of the mental health charity Mind, said: “People found 'fit for work' have not been cheating the system; rather, in most cases, they have engaged with the system with genuine intentions and been turned down for benefits - often wrongly as appeals figures show.”